Damages of the electricity downtime estimated at USD 81 billion

A group of energy experts has estimated at USD 81 billion the damages caused by the electricity crisis and its protracted contingency on the domestic economy and Venezuelans.

Miguel Lara, ex general manager of the Office of Operation of Interconnected Systems (Opsis); university professors Nelson Hernández, José Manuel Aller and Víctor Poleo; Iñaki Rousse, former executive director of utility La Electricidad de Caracas, and international advisor José Aguilar, via Skype, took issue with Venezuelan President Hugo Chávez, who voiced satisfaction for his government way of dealing with the electricity issue.

They commented in a press conference that President Chávez's Administration "has been aimed at destroying the national production apparatus and deceiving the country." According to them, "the announced goals have not been attained; a very high cost to the nation has been produced and the problem has not been solved as they purport to make understand."

"The electricity crisis has not been solved. Available generation is not enough for the accrued demand; the transmission system is underused to bring energy from Guayana in order not to increase rationing; the distribution system continues collapsed and users suffer unnecessary power cuts for this reason. There are not plans on maintenance of grids and nets," Lara elaborated during their presentation.

The speaker specified that in 2010, 377 failures over 100 megawatts (Mw) were reported, in addition to 430 in 2011; that is, more than one failure of such an extent every day.

Damages

As appears from a research conducted by the expert team, between January 2010 and November 2011, the Venezuelan government rationed the equivalent of 27,000 Giga-watts-hour (GWh); that is, the approximate consumption of two cities as big as Caracas.

Based on their estimates, the electricity standoff of 2010 and the contingency in 2011 caused damages to the domestic economy, including basic industries, manufacturing plants and trade, as well as people, for USD 81 billion.

This sum has been deducted from a cost estimated for 2010, of USD 2,950 / Mwh or USD 2.95 million / Gwh, according to international standards. Such a value is associated with the rationing reported in the aforementioned 23 months.

Hence, Poleo mentioned, the large outage at furnaces and cells of Guayana's steel and aluminum companies made an economic impact of USD 67.4 billion and USD 13.8 billion on the rest of the country, for a total amount of USD 81.2 billion, which can be matched with the annual oil bill.

He reported that in 1950-1998, public and private investments were made in the electricity sector for USD 50 billion; in 1999-2011, among allocations and procurement, around USD 50 billion were approved. "Adding these funds and the damages caused to economy and society will yield USD 130 billion, four times the international reserves and six times the cost of the oil strike in 2002."

Translated by Conchita Delgado